There has been a lot of talk about the capacity crisis and subsequent increase in fares in the Indian skies. Airlines are trying very hard to get over the crisis by inducting new aircraft – either by speeding up the deliveries or in some cases taking up aircraft from lessors who are terminating lease with Jet Airways.
What is not talked about is the impact of this on international passengers and what this crisis means for foreigners travelling to India as well as outbound tourist and business travel from India. The airline had five main hubs which comprised of Amsterdam, Paris, London, Singapore and Hong Kong. At each of these places, the airline had strong code-share partnerships with which it helped feed to umpteen destinations beyond these five hubs.
The North American market was effectively served from London, Amsterdam and Paris – with its own metal flying to Toronto from Amsterdam and a robust code-share in place with Delta, KLM, Air France and Virgin Atlantic for transfer of passengers to multiple destinations in the USA and Canada.
The South East Asian market had robust code share beyond Singapore with Garuda Indonesia – to service the Indonesian market along with Jetstar while Qantas and Hong Kong Airlines served the Australian market with feed from Jet Airways flights in Hong Kong, Bangkok and Singapore. The Chinese and Japanese market were effectively served with a code share with Cathay Pacific and Cathay Dragon, along with China Eastern and ANA.Not to be left behind were a spate of code shares which did not see the volume as high as those to the US but certainly had the higher margins due to the capacity constraints and limited options. These included
tie-ups with AeroMexico, Air Serbia, Fiji and Vietnam Airlines to take passengers to Mexico, parts of Europe, Fiji and Vietnam.
Add to that the code share with equity partner Etihad from Abu Dhabi and you have a network which was unmatched by any other Indian carrier – including Air India which is a Star Alliance member but does not co-operate with many of the alliance partners and where it does, it is to limited routes.
London saw four flights a day – three from Mumbai and one from Delhi, comprising 1,384 seats each way, each day. Amsterdam saw one daily frequency from Mumbai and Delhi on the B77W and the Bengaluru service was operated by the A330s, which saw close to 1000 seats from India. Paris saw an average of 500 seats daily from Mumbai and Chennai, while Singapore – which saw a mix of wide body and narrow body aircraft to match seasonality had three frequencies from Mumbai and Delhi, while two from Bengaluru and one from Pune – a total of nine flights a day.
International flights do not see capacity dumping in quick succession, unlike domestic. The reasons are many but the primary ones are that the international flights come under the Air Services Agreement (ASA) between the two countries, which for most countries have a cap on seats or frequencies.
While countries which had capacity in their ASA to add flights flew in additional flights or different aircraft type with higher capacity to cater to the immediate bookings and stranded passengers, a medium-term solution is not in sight. The issue was compounded by the fact that closure of Pakistani airspace led to cancellation of flights by a few airlines like United which has suspended its flights to New Delhi and Air Astana which suspended flights to New Delhi from Almaty and Nur-Sultan. These former catered to traffic to North America while the later offered popular and affordable connections to Europe. Airlines like Air Italy and WOW air which promised to offer affordable and better connections have withdrawn after a short stint in India, which has not helped the capacity crisis.
While domestic routes and slots are being grabbed quickly, the same is not happening on international routes. The IndiGo-Turkish Airlines code share is yet to be fully operational and will be restricted to only 20 destinations beyond Istanbul, a fraction of what Jet Airways was offering. While Spicejet has signed an MoU with Emirates, it will take time for the code-share operations to be operationalised. Till then, the long-haul international seats are on short supply.
Airlines are seeing higher occupancy numbers and fares to popular international destinations have shot up, which are already putting a spanner in travel plans of Indians this summer. Will the Indian government give an additional quota of seats to foreign carriers? Carriers from Dubai (Emirates, Fly Dubai), Singapore (Singapore Airlines, Scoot, Silk Air) and Malaysia (Malaysian Airlines, AirAsia group and Malindo) have been pushing for additional seats to India and more points of call. On the other hand are carriers which enjoy possibility of adding flights to India but haven’t. These include Air France where 35 services are allowed between India and France and the Netherlands (KLM) which has an open sky agreement with India to six metro cities.
What needs to be seen is how big is the impact on business and travel for those coming to India. That will have a larger economic impact on the country. If the government decides to ease rules and offer additional seats to foreign carriers, will it be for three months or a limited time like the government has been allocating slots in India or will it be permanent? While for domestic routes, airlines have quickly tried grabbing whatever is available, if the seats on offer are for limited period, not all International airlines will clamor for those additional seats or frequencies temporarily, instead they may just enjoy the higher fares on tighter capacity.
Ameya Joshi is the founder of aviation analysis blog NetworkThoughts